US Consumer Sentiment Rises for First Time in Four Months as Petrol Prices Drop
By Aboki Forex —
American consumer sentiment improved in early June for the first time in four months. The University of Michigan's preliminary sentiment index jumped to 48.9 from a record low of 44.8 in May. That beat the expectations of most economists surveyed by Bloomberg.
But the reading remains the second lowest since the 1970s. Lower petrol prices gave some relief to Americans struggling with high inflation.
Consumers now expect prices to rise at an annual rate of 4.6% over the next year. That is down from 4.8% in May. They also see costs rising at 3.4% annually over the next five to ten years, erasing the jump seen in the prior month.
The drop in petrol prices in recent weeks made Americans less pessimistic about their personal finances. Lower income consumers, who spend a bigger share of their budget on fuel, showed the most improvement.
Still, overall sentiment remains low because of the Iran war and the wave of inflation it triggered. Separate data this week showed consumer prices rose 4.2% in May from a year ago, the most in over three years.
Joanne Hsu, director of the survey, said that while there is a mild reprieve, high petrol prices are still very noticeable to consumers. She said the current price level remains unacceptable and dampens how people view the economy.